Debt Policy and Economic Growth in a Small Open Economy Model with Productive Government Spending
AbstractIn this paper, the effects of introducing constraints on government borrowing have been examined by using a continuous-time overlapping generations model of a small open economy. Government placing constraints on the amount of government bonds have been considered outstanding by establishing an upper limit, or target level, for the ratio of government bonds to gross domestic product. First it is shown that there exist multiple steady states in the model small open economy. Next the target level for bonds affecting economic growth rates at the steady states is examined.
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Date of creation: May 2010
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government; borrowing; overlapping; generations; model; positive; amount; asset; holdings; economy;
Other versions of this item:
- Futagami, Koichi & Hori, Takeo & Ohdoi, Ryoji, 2010. "Debt Policy and Economic Growth in a Small Open Economy Model with Productive Government Spending," ADBI Working Papers 212, Asian Development Bank Institute.
- Koichi Futagami & Takeo Hori & Ryoji Ohdoi, 2010. "Debt Policy and Economic Growth in a Small Open Economy Model with Productive Government Spending," Macroeconomics Working Papers 21875, East Asian Bureau of Economic Research.
- E00 - Macroeconomics and Monetary Economics - - General - - - General
- E21 - Macroeconomics and Monetary Economics - - Macroeconomics: Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
- E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-06-04 (All new papers)
- NEP-CWA-2010-06-04 (Central & Western Asia)
- NEP-DGE-2010-06-04 (Dynamic General Equilibrium)
- NEP-FDG-2010-06-04 (Financial Development & Growth)
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